The job cuts at Philips, also one of the biggest makers of medical equipment and consumer electronics, come on top of 7,000 cuts in the fourth quarter. It currently employs 121,000 worldwide.

The Amsterdam-based company had posted a profit of euro1.40 billion for the same period a year earlier, when Philips booked euro1.2 billion in gains on the sale of stakes in companies.

In the fourth quarter of 2008, however, the company said it had to write down the value of stakes it holds by more than euro1 billion.

Sales fell 9.7 percent to euro7.62 billion, Philips said.

"The development of our quarterly results reflects the unprecedented speed and ferocity with which the economy softened in 2008," Chief Executive Gerard Kleisterlee said in a statement.

Among its major divisions, operating earnings tumbled to euro22 million from euro427 million at its consumer products division, with sales of televisions falling precipitously.

Operating profits in the lighting division – ignoring restructuring and other charges – would have fallen to euro143 million from euro170 million.

Health care offered a bright spot, with sales up 9 percent, excluding the effects of currency and acquisitions. Operating profit fell to euro301 million from euro318 million, and Philips said it expected the U.S. health care market to weaken in the first quarter as hospitals put off buying expensive diagnostic machines.

Philips shares rose 5.1 percent to euro13.25 in Amsterdam.

The results "are definitely not good enough to suggest that Philips can steer clear from the weak overall economy, but they are not so bad as to suggest that Philips is in any serious trouble," said analyst Eric de Graaf of Petercam Securities in a note on the earnings. He repeated an "add" rating on the shares.

He noted that in recent years the company had astutely diversified away from businesses that are now among the hardest-hit – notably by selling a majority stake in its semiconductor manufacturing arm for euro4.3 billion (US$5.58 billion) in 2007 to private investors including Kohlberg Kravis Roberts & Co.